Real Estate Investor Magazine South Africa July 2014 | Page 58
US
BY MONIQUE TERRAZAS
US House Prices
The recovery continues at a slower pace
T
he US economy grew just 0.1% in the first
quarter of 2014, as exports tumbled and
businesses accumulated stocks at the slowest
pace in nearly a year, according to the US Bureau of
Economic Analysis. The US economy is expected to
expand by 2.5% this year and by another 3.2% in 2015.
House prices
According to the most recent Global Property Guide
investment analysis for Q1 of 2014, house price
increases in the US are now decelerating. The S&P/
Case-Shiller seasonally-adjusted national home price
index rose by 5.41% during the year to Q1 2014, down
from year-on-year price rises of 9.37% in Q4, 11.96% in
Q3, 8.47% in Q2, and 8.25% in Q1 2013.
Almost all 20 major US cities saw strong house price
rises, with Las Vegas registering the biggest yearon-year increase of 19.25% in Q1 2014, followed by
San Francisco (19.05%), San Diego (17.06%), Los
Angeles (15.05%), Miami (14.36%), Atlanta (13.88%),
Detroit (13.87%), Portland (10.01%), Seattle (9.87%),
Minneapolis (9.72%), Chicago (9.71%), Phoenix
(9.4%) and Tampa (9%). (These figures are adjusted for
inflation, as are all subsequent figures.)
Q ua r ter-on-qua r ter, t he S& P/Ca se-Sh i l ler
seasonally-adjusted national home price index dropped
slightly by 0.5% in Q1 2014, after a quarterly decline of
0.07% in Q4 2013, and quarterly increases of 4.24% in
Q3, 1.7% in Q2, and 3.24% in Q1 2013.
The FHFA’s house price indices registered more
moderate year-on-year increases than Case-Shiller,
as usual. The FHFA’s seasonally-adjusted purchaseonly US house price index rose by 5.14% year-on-year
in Q1 2014, the lowest annual increase in the past five
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July 2014 SA Real Estate Investor
quarters. FHFA’s all-transactions house price index
rose by 3.46% year-on-year to Q1 2014, after annual
price increases of 3.61% in Q4, 3.05% in Q3, 2.88% in
Q2, and 0.59% in Q1 2013.
New housing units
The total number of new housing units authorised in
the US increased by 3.8% year-on-year to April 2014
from the same period last year, to 1,080,000 units,
according to the US Census Bureau. The Northeast
region saw the biggest increase, with a 12% year-onyear rise in the number of housing units authorised to
112,000 units in Q1 2014. It was followed by the West
(11.3%) and the South (1.7%). The Midwest region
registered an annual fall of 4.7%.
The number of US housing completions rose by 8.2%
to 132,000 units. In Q1 2014, new privately-owned
housing unit starts fell 1.5% year-on-year, to 134,000
units, while the number of new houses sold dropped
1.8% in Q1 2014 from the same period last year, t L